Financial services provide a variety of products and business-related services to consumers worldwide. This article discusses what these services include. The industry supports liquidity in the financial system and helps consumers access credit, buy and sell products, and manage their money. To better understand what financial services entail, we should first understand the industry’s current and future role. Listed below are just a few of the major components of this industry. They also support the economy, provide employment, and promote international trade.
Financial services are a global industry
Despite its relatively small size, the financial services industry contributes around 20% of the world’s GDP. In fact, the industry is crucial to economic growth. While the past decade has been challenging, recent events have spurred a recovery in most markets. While established financial services firms have a dominant position in developed markets, fintech firms and digital public goods are quickly gaining ground in emerging markets. In order to stay competitive, established financial services firms must adapt to emerging technology, while new entrants to the industry are leveraging digital public goods and digital currencies.
They provide a variety of products and services to consumers
Retail financial services providers offer a wide variety of products and customer-facing experiences. The vast array of products and services they provide includes loans, mortgages, credit cards, and insurance. These organizations may also be wholesalers. These services affect the balance sheets of providers. Wholesale products can include debt instruments that institutions purchase in the secondary market or join a syndicated loan through a correspondent. Historically, depository institutions have been suppliers of wholesale products.
They are a major consumer of business services
The financial services industry has many types and sectors, but one of the most important is insurance. Insurance services help consumers and businesses protect themselves against liability, loss of property, and death. Insurance brokers and agents represent the insured, and shop for insurance policies. Underwriters analyze risks associated with insuring clients, and advise investment bankers on the level of risk to take. Reinsurers sell insurance to insurers, protecting them against catastrophic losses.
They promote liquidity in the financial system
High levels of liquidity have significant benefits for the financial system and the economy. These services increase the availability and price of financial assets, channel funds more efficiently, and prevent imbalances in specific markets. They also contribute to the dispersion of risks. The benefits of high liquidity in the financial system are substantial, but the risks they entail are not always clear. The risks of financial crises are also lowered when a high level of liquidity is present.
They are customer-centric
Customer-centricity is the new imperative for financial services brands. In a world where customer experience is the new king, banks are no longer just a service provider. They are profit centres as well. In an age of disruptors, banks need to reinvent themselves and put their customers at the heart of their business. This requires rethinking their products and services and putting customers first. To achieve customer centricity, banks must learn more about their customers, improve their analytics and innovate boldly.